The Difference Between the Current Spot Price of an Asset

question 5

Multiple Choice

The difference between the current spot price of an asset and the corresponding futures price is known as the ___ for the futures.

• A) spread
• B) cost of carry
• C) basis
• D) index arbitrage

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Definitions:

Direct Materials

Raw materials that can be directly attributed to the production of finished goods, considered a variable cost.

Flexible Budget

A budget that adjusts or flexes with changes in volume or activity, allowing companies to better forecast costs and revenues.

Personnel Expenses

Costs associated with employing staff, including wages, benefits, and training costs.

Planning Budget

A financial plan that estimates the revenue and expenses for a specific period in the future, often used for setting financial goals.